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Organizational Structure

Essay by   •  January 5, 2014  •  Essay  •  1,036 Words (5 Pages)  •  1,153 Views

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Organization structure can be defined as a formal pattern of designed systems which shows how people and jobs are grouped in an organization. After appearing during the industrial revolution, organization structure has experienced quickly development and various types of organizational structures have been created in order to meet different requirements from different types of organization. There are two basic theories about structure design. Classic theory holds the opinion that organization is mechanism. So the structure must help the organization operate more efficiency. Guiding by this theory, divisional structure and functional structure have been created. Another theory named modern theory indicates that organization needs to fit the external environment and to be effective to ensure its stable development. Under this theory, horizontal structure and matrix structure have been exploited. As a matter of fact, each of these structures has its own strengths and weaknesses. Consequently, they can be suitable for in different situation. All of the structures can be shown visually by organizational charts in which levels of hierarchy and span of control can all be indicated. It also helps people know how people and groups are interacted and how they fit into a whole organization. This essay sets out to analyze the differences between divisional and matrix structures from the perspectives of their appearance, features, strengths and weakness and the relationship with other organization elements such as culture and ethics. In order to show the theory clearly, chats and examples will be carried out at the same time.

As mentioned before, functional structure was designed under the guidance of "Mechanism" theory. It is suitable for an organization in a stable environment and routine technology area which is pursuing plan, control and standardization. Contrary to this, matrix structure appears when the environment became unstable and it is a result of modern theory. According to Daft, matrix structure is mainly used in three conditions. The first is when the organization meets the pressure from scarce resources. For example, when the organization does not have enough money to hire enough full time engineers and every one needs to work in two or more groups. Anther condition is when it meets the pressure from two or more critical outputs such as in-depth knowledge and frequent new products. The last one is when the organization domain is both complex and uncertain. This means the organization confronts with frequent external changes. The appearance of divisional structure is a result of the increasing needs to higher the ability to adapt to fast changing external environment. It can be developed into multi-divisional structure when needed. This means in each division, there can be several second divisions (See xxxx). This structure may help ensure quickly customer responsiveness and the efficiency. It is generally held that since benefits are derived, high cost of money and human resource is inevitable.

Functional structure is an organization system in which activities are grouped together by common function from the bottom to the top of the organization. All human knowledge and skills related to specific activity are consolidated aiming to provide a valuable depth of knowledge for the organization. For example, accountants are grouped in the accounting department and people with marketing knowledge are grouped



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